U.S. Petroleum Weekly – 05 November 2009
I will today start with U.S. petroleum weekly which I will prepare every week based on the the new EIA data.
Most widely followed category – crude oil stocks came yesterday at -4 million barrels vs. consensus of 0.8 million barrels increase. A surprising figure on upon first impression, one warranting crude oil price increase, but if we review the the data in detail we will find that the fundamentals of petroleum supply and demand have not changed and the oil price rise is not supported by supply and demand fundamentals.
Chart 1. Change in U.S. Crude Oil and Distillates Stocks
Source: EIA, Tainted Alpha Calculations
Other oils category draw also contributed to Total Crude Oil and Petroleum Products Ending Stocks decrease of 8.4 million barrel draw last week with 2.1 million barrel decrease in stock.
Chart 2. U.S. Total Crude Oil, Gasoline and Distillate Ending Stocks
Source: EIA
Looking at the crude oil, distillate, gasoline stocks, both distillate and crude oil stocks are elevated. It is evident that the crude oil stocks have began to come down, but the reason is not increased demand but reduced (net) imports which hit the level seen only four times in last nine years.
Chart 3. U.S. Refinery Inputs, Capacity And Utilization
Source: EIA
In line with reduced (net) imports we have inputs to refineries at levels seen only nine times in last nine years.
Chart 4. Weekly U.S. Total Crude Oil and Petroleum Products Imports and Exports
Source: EIA
Evidently, we don’t have recovering demand, and supplies are abundant for the time being. We have not seen the decrease in stock during the January to April, as usual and refiners now are cutting capacity to reduce stocks. In my view the current oil price is not warranted.
As noted previously I’m running a short USO position.